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Minimum wage rate and labors’ market prices.

I'm Supposn

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Minimum wage rate and labors’ market prices.

Products “Market prices” are affecting by various factors. Enforcement of government laws affecting regarding trade or contracts regarding a product, is often such a price affecting factor. Those using the term ‘market rates” applicable to a legally enforced minimum wage rate within a marketplace, are referring to a theoretical, indefinite, (i.e. not actually existing) price that excludes governments’ minimum wage laws as not existing.

Regardless of some persons preferences, governments’ minimum wage laws are existing factors applicable within marketplaces. Respectfully, Supposn
 

ttwtt78640

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Minimum wage rate and labors’ market prices.

Products “Market prices” are affecting by various factors. Enforcement of government laws affecting regarding trade or contracts regarding a product, is often such a price affecting factor. Those using the term ‘market rates” applicable to a legally enforced minimum wage rate within a marketplace, are referring to a theoretical, indefinite, (i.e. not actually existing) price that excludes governments’ minimum wage laws as not existing.

Regardless of some persons preferences, governments’ minimum wage laws are existing factors applicable within marketplaces. Respectfully, Supposn

Think of the MW as being a minimum (hourly) government mandated productivity standard. If an employee cannot generate MW (plus other direct labor costs and, in most cases, profit) then they are not going to have a job.
 

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Think of the MW as being a minimum (hourly) government mandated productivity standard. If an employee cannot generate MW (plus other direct labor costs and, in most cases, profit) then they are not going to have a job.
Ttwtt78640, employers’ wage rate decisions are generally not motivated by altruism. Employers generally hire or retain employees and pay wage rates that they have determined to be to their own and/or their enterprises’ best interests.

Employers generally would choose hiring and retaining fewer employees, and/or paying lesser wage rates, if they didn’t fear that doing so would be of lesser net benefit, and/or of greater net detriment to their own or their enterprises net best interests.
Employers act to optimize their short and longer-term profits. If they fail to act in these manners, their enterprises will be less viable. Respectfully, Supposn
 

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Federal minimum wage:
2009: $7.25
2010: $7.25
2011: $7.25
2012: $7.25
2013: $7.25
2014: $7.25
2015: $7.25
2016: $7.25
2017: $7.25
2018: $7.25
2019: $7.25
2020: $7.25

Wealth of 400 richest Americans:
2009: $1,270,000,000,000
2020: $3,200,000,000,000
 

I'm Supposn

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Federal minimum wage:
2009: $7.25
2010: $7.25
2011: $7.25
2012: $7.25
2013: $7.25
2014: $7.25
2015: $7.25
2016: $7.25
2017: $7.25
2018: $7.25
2019: $7.25
2020: $7.25

Wealth of 400 richest Americans:
2009: $1,270,000,000,000
2020: $3,200,000,000,000
Ringo Stalin, in February-1968, the federal minimum wage rate was increased to $1.60 per hour.
Using the Bureau of Labor Statistics CPI Inflation calculator, https://www.bls.gov/data/inflation_calculator.htm , we learn that was then the minimum rate’s peak historical purchasing power.

Adjusted for inflation, $1.60 in February-1968 is equivalent value as $12.48 in September-2020 when the minimum rate has remained at $7.25 per hour.
[(12.48 – 7.25) / 7.25] = 72.1%

The federal minimum wage rate affects all USA low wage rates and the minimum rate’s purchasing power has decreased in excess of 72% since February -1968.
To the extent of its purchasing power, the minimum rate reduces incidences and extents of poverty among USA’s working-poor.

“We all do better if we all do better”. If we further reduce poverty among USA’s working-poor, even the “400 richest Americans” will do better. Respectfully, Supposn
 

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Ringo Stalin, I’m among the proponents for the federal minimum wage rate being annually increased in a uniform manner until the rate achieves 125% of its February-1968 purchasing power. Thereafter it should be monitored and annually automatically increased if required to enable retaining no less than 125% of the rate’s February-1968 purchasing power. Respectfully, Supposn
 

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I can only conclude we have another thread here based on flawed economic thinking.

In market economics the main influence into labor price is the demand for that labor against the available supply of that labor, and you do not get to discount influencers such as productivity. The bigger issue is demand for labor is a derived demand. For labor to have anything to do there must be demand for a product or service.

Also in market economics, any minimum wage is a market distortion. The determination of a minimum wage being $7.25, $15, or anything else is a political distinction based on a concept of "living wage."

Where this gets dicey is the idea of a labor market distortion in order to have a certain percentage of participants in the economy do so in a healthy way.

Meaning on one side of the fence, "conservatives" will generally speaking argue higher minimum wages could lead to secondary distortions of artificial price inflation, and/or less demand for workers at that rate due to the aggregate shift on the demand / supply curves, and/or a change in whom competes for jobs at that level of minimum wage.

On the other side of the fence, more "liberal" leaning economists will talk about overall standard of living as a means for more healthy participation in the consumption of the standard basket of products and services. Said another way bringing the lowest income quintile closer to the one above it creating a new participation standard that would act like economic stimulus. Since the lowest 2-3 income quintiles tend to spend just about everything they make it creates a condition of higher velocity of money in an economy. More is bought, the consumer spending part of GDP gets an immediate increase.

I tend to side with the latter of the two schools of thought, but that has nothing to do with an argument of market forces. Just about everything we are talking about is a market economic distortion of some kind, but that stands to reason as we are a mixed economic model. Have been for decades now, if not well over a century when most realized pure market economics will kill itself on a long enough timeline just as pure planned economics will.
 

Ringo Stalin

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Employees of Amazon, which is run by the world's richest man Jeff Bezos, whose fortune is more than $200 billion, decided to strike against low wages.
Well, isn't that stupid?
If he paid all the decent salaries, would he be the richest man in the world?
 

I'm Supposn

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I can only conclude we have another thread here based on flawed economic thinking.

In market economics the main influence into labor price is the demand for that labor against the available supply of that labor, and you do not get to discount influencers such as productivity. The bigger issue is demand for labor is a derived demand. For labor to have anything to do there must be demand for a product or service.

Also in market economics, any minimum wage is a market distortion. The determination of a minimum wage being $7.25, $15, or anything else is a political distinction based on a concept of "living wage."

Where this gets dicey is the idea of a labor market distortion in order to have a certain percentage of participants in the economy do so in a healthy way.

Meaning on one side of the fence, "conservatives" will generally speaking argue higher minimum wages could lead to secondary distortions of artificial price inflation, and/or less demand for workers at that rate due to the aggregate shift on the demand / supply curves, and/or a change in whom competes for jobs at that level of minimum wage.

On the other side of the fence, more "liberal" leaning economists will talk about overall standard of living as a means for more healthy participation in the consumption of the standard basket of products and services. Said another way bringing the lowest income quintile closer to the one above it creating a new participation standard that would act like economic stimulus. Since the lowest 2-3 income quintiles tend to spend just about everything they make it creates a condition of higher velocity of money in an economy. More is bought, the consumer spending part of GDP gets an immediate increase.

I tend to side with the latter of the two schools of thought, but that has nothing to do with an argument of market forces. Just about everything we are talking about is a market economic distortion of some kind, but that stands to reason as we are a mixed economic model. Have been for decades now, if not well over a century when most realized pure market economics will kill itself on a long enough timeline just as pure planned economics will.
OrphanSlug, you put the concept of “a living wage” onto the minimum wage rate “discussion table”. I don’t believe a “living wage” law’s feasible without being accompanied by a guaranteed income. “Living wage“ is among a large proportion of your post not germane to the minimum wage rate topic.

You state, “in market economics, any minimum wage is a market distortion”, (i.e. minimum wage rates DOES determine the price of absolute minimum wage rate labor, and DOES influence the prices of all low wage labor in the markets. Isn’t every factor that that influences prices in markets’, “a market distortion”. Essentially, how does the minimum rate’s influence upon wage differentials differ from real estate taxes influences upon prices in the real estate markets? Is anyone arguing all real estate taxes are unjustified? Don’t fuel taxes distort prices in transportation and industries and markets?

Permitting minimum rate’s purchasing power to be reduced does enable more low-wage jobs to be created and additionally more potential employees with even lesser than current low-wage workers’ capabilities have more employment opportunities. But jobs of lesser rates and/or reasonable opportunities for advancement, are of lesser value to individuals and of lesser contributors to the economic and social wellbeing of the nation. Reducing minimum rate’s purchasing power increases the pools of workers and job applicants faster than the jobs created due to the lesser purchasing power of the minimum rate; counter intuitively, it does not reduce unemployment rates for the lowest wage rate workers, but it can effectively increase those unemployment rates among such workers and job applicants.

To the extent of applicable, enforced, minimum wage rate’s purchasing powers, they reduce incidences and extents of poverty among the working-poor. That’s minimum rate laws’ primary purposes and justifications.
Respectfully, Supposn
 
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